1. Embrace Failure
2. Test Your Idea
- Food distributors and importers are our potential customers, not wholesalers.
- There was a market for ugly but perfectly edible food.
- Yes, we can continue building on our idea.
When we were invited to the Venture Capitalist Investment Competition (VCIC) Asia Regional Finals on 3/3/18 to participate as a startup, we couldn’t say no. An opportunity to practice our pitches, learn how to negotiate terms and rub shoulders with actual venture capitalists(VCs)? We’re definitely in!
This was definitely a most rewarding experience for us. And today, we want to share four of our biggest takeaways!
Prior to the competition, we had the impression that compared to deep tech companies, a social enterprise like ours wouldn’t stand a chance.
Hence, it was surprising when we found that our social impact was the most appealing factor to the VCs. Not only were they heartened by what we were doing, they also felt that social causes like ours were worthwhile investments!
This came from many of the students who would go on to become VCs. And our value proposition turned out to be our social impact.
We realised that times have changed and that we definitely had a distinct edge over purely profit-driven companies.
VCs will be the ones helping you scale up and grow. They will connect you with the right networks that are key to the success of your startup. What happens if there’s a mismatch between your interests or worst still, your end-goals?
We learned that an ideal VC would:
So, always be on the lookout for investors with the capacity and interests to help your startup achieve your long-term goals.
Knowing how to negotiate the terms in a term sheet is essential to secure a good investment. The negotiation session at VCIC was certainly helpful in preparing us for such occasions in the future.
How do we differentiate between an agreement that is favourable or not? How can we protect the interests of both the investor and the founder? These are questions that we as founders, need to know how to answer.
If you are planning to raise funds through seeking out potential investors, we highly encourage you to know this skill like the back of your hand! Doing so will not only help protect the shares of the investors and founders, but also ensure that your startup is going in the right direction.
We’ve said it before, and we’ll say it once more.
After a networking session with the VCs, we’ve ascertained this fact yet again. While our profit margin, market size and company traction are key to securing investments, these factors are secondary. Our primary objective should always be building a strong team first.
Your team matters most because you will be the ones bringing the ideas to life. Business ideas can change and your company’s performance can improve. But your team is forever!
Recently, we won the Grand Prize at the Institution of Innovation & Entrepreneurship Social Startup Challenge 2018! Hurrah!
This would not have been possible without the help of our interns Jia Le and Yu Sheng, who also represented us at the competition.
The award was a sign of validation that here at TreeDots, we are doing real work. At the competition, we shared about two of our social impacts: one, reducing food waste; and two, providing affordable food prices to lower-income groups.
At TreeDots, we don’t simply sell to businesses. We also reach out to lower-income groups and ensure that for them, each meal only costs $0.48. Because of that, they are able to meet their required 2 servings of vegetables and 3 servings of meat per day. This was not achievable with the prices at supermarkets.
To top it off, our judges at the competition were active players in the social entrepreneurship scene. It was heartening to know that all our hard work had been recognised.
As of February 2018, we saved a whopping 1.5 tonnes of food– our biggest achievement to date. We started out with lots of hurdles because we were new to the industry and had to learn everything from scratch. During our first 2 months of operations, we only made $200 in revenue.
However, we pulled through. We continued making refinements and spoke to our advisors. Ultimately, we managed to save so much food in just 6 months. Seeing the impact we made is a huge validation. Previously, we constantly questioned ourselves if we were doing the right thing. Now, we want to make that number grow, and grow exponentially!
The three of us have varied skill sets and experiences. Hence, we all come in from different angles and that really value-adds to the team. You want different skills and styles of thinking so that you have different ways of approaching a problem.
Cai (also known as Jia Cai) puts on the table the tech skills and expertise that Tylor and I lack. Tylor’s experience in investment banking helps increase our sales and attract potential investors. I go micro, and it helps because I’m handling the operations.
That’s how we value-add each other.
The startup scene can be very intimidating. Our advice to budding entrepreneurs is: START DOING. If you have an idea, you’d have some things you wanna test- go ahead and test it. Test it and talk to somebody! When you start doing and getting your hands dirty, you’ll eliminate that initial fear.
You WILL face rejection, and that’s okay. If lots of people reject your idea, that’s good too because then you’ll realise that you might be doing certain things the wrong way.